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Deal #1388

Location

Location #1

Spatial accuracy level

Exact location

Location

Bomi, Liberia

Latitude

6.722204078515199

Longitude

-11.000731723632839

Target country

Liberia

Comment on location

Bomi; Gbarpolu; Grand Cape Mount; Bong counties. SPOTT website (http://www.sustainablepalmoil.org/company/sime-darby-plantation-sdn-bhd/#map) provides exact location of plantations (A-K). Of this gross concession area, 159,827 ha (51%) is planned in Gbarpolu County, 57,008 ha (18%) in Bomi County, and 55,342 ha (18%) in Bong County.

General info

Land area

Intended size (in ha)

311987.0

Size under contract (leased or purchased area, in ha)

[1954] 120000
[2009] 220000

Size in operation (production, in ha)

[2014] 10000
[2016] 3000
[2018] 10400
[2020] 10300

Comment on land area

120000ha original concession from 1954, 100000ha additional per 2009 to be planted. Gross concession area is 311987ha. Plus 44,000ha for outgrowers.Of this gross concession area, 159,827 ha (51%) is planned in Gbarpolu County, 57,008 ha (18%) in Bomi County, and 55,342 ha (18%) in Bong County. According to a company's representative, 3,000ha of oil palm had been established over a period of 8 years. Another website states that the total concession area is 316 912ha. Liberia National Concession portal states 310 000 ha.

Intention of investment

Agriculture unspecified (176000 ha)
[current] Non-food agricultural commodities (44000 ha)

Comment on intention of investment

80% oil palm and 20% rubber

Nature of the deal

Lease

Comment on nature of the deal

This 2009 concession is referred to as an ‘Amended and Restated Concession Agreement’ as it incorporates 120,000 ha of land that was the subject of a previous concession agreement dated 9th July 1954 with B.F. Goodrich.

Negotiation status

[2009] Concluded (Contract signed)
[2020] Change of ownership
[current] Concluded (Contract signed)

Comment on negotiation status

company hopes to achieve full capacity in 2023. Another source states start date is 26:06:2009. In July 2019, the company confirmed that they are looking to either sell the land to another company (looking at three options- all unnamed at this stage), or give the plantation back to the government. The firm will exit the country at the end of 2019. Sime Darby sold the business to MANCO in January 2020. MANCO takes over the existing lease of Sime Darby, therefore the duration of the lease is not extended.

Implementation status

[2010] In operation (production)

Comment on implementation status

company hopes to achieve full capacity in 2023. 200 hectares of plantations was destroyed by a fire which occurred in March 2014. The cause of the fire is unknown. No new areas have been planted in 2017 or 2018. The company is considering pulling out of the project. There are reports in January 2019 that the company is looking to sell its shares in the plantation, however the company has not confirmed or denied these allegations.

Leasing fees

Annual leasing fee

Annual leasing fee currency

US Dollar ($)

Annual leasing fee type

per ha

Comment on leasing fees

US$5.00/yr/dev ha, US$1.25/yr/undev ha (8yrs), US$2.00/yr/undev ha (55yrs). To be reviewed every 5 years but not to increase more than 20%. Data obtained from a formal source. The company paid US$187.500 surface rental for the period 1 July 2010 - 30 June 2011 (=US$0.85/ha)

Contract farming

Yes

Not on leased / purchased area (out-grower)

Yes

Not on leased / purchased area (out-grower, in ha)

44000

Contracts

Contract #1

Contract date

2009-07-23

Contract expiration date

2072-07-29

Duration of the agreement (in years)

Comment on contract

Another data source states 26:06:2009. Renewable for a further 30 years. The company, government and community are to review the agreement every 5 years.

Employment

Number of domestic jobs created

Jobs created (domestic)

Yes

Planned number of jobs (domestic)

35000

Current number of jobs (domestic)

[2012] 1600

Comment on jobs created (domestic)

One worker has threatened to set himself ablaze unless the company pays him compensation for dismissal- the company did not give an adequate reason for the dismissal and has not given compensation. Workers are only paid $5.51 per day on Sime Darby plantations. Workers are unhappy with the poor wages and working conditions. In line with the company exit strategy, workers have been retrenched from July 2019.

Investor info

Operating company

Mano Palm Oil Industries Inc. (MPOI) (#41872)

Comment on investment chain

Sime darby acquired the original concession through merger with Kumpulan Guthrie Berhad in 2007 who started the plantation before the civil unrest. Sime Darby receives financial assistance from European banks and pension funds including the Norwegian pension fund, UK-based Schroder investment management and Dutch funds PfZW. Sime Darby sold the business to Mano Palm Oil Industries in January 2020. The disposal of 100% equity interest to Mano Palm Oil Industries Ltd was completed for a cash consideration of US$1, plus an earn-out payment to be determined by the average future crude palm oil (CPO) price and future CPO production of SDP Liberia in 2022.

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Data sources

Data source #1

Data source type

Research Paper / Policy Report

URL

http://www.wrm.org.uy/countries/Africa/Oil_Palm_in_Africa.pdf

File

Date

2010-01-01

Comment on data source

Data source type

Other (Please specify in comment field)

URL

http://www.sustainablepalmoil.org/company/sime-darby-plantation-sdn-bhd/

File

Comment on data source

SPOTT- Sustainable Palm Oil Transparency Toolkit. Company Profile: Sime Darby Plantation Sdn Bhd

Data source #11

Data source type

Research Paper / Policy Report

URL

http://www.rightsandresources.org/wp-content/uploads/Communities-as-Counterparties-FINAL_Oct-21.pdf

File

Date

2014-10-30

Comment on data source

Communities as Counterparties : Preliminary Review of Concessions and Conflict in Emerging and Frontier Market Concessions.

Data source type

Media report

URL

http://www.farmlandgrab.org/post/view/23290-fire-destroys-200-hectares-of-sime-darby-s-liberia-plantation

File

Date

2014-03-19

Comment on data source

Farm Land Grab- Fire destroys 200 hectares of Sime Darby's Liberia plantation

Data source type

Media report

URL

https://www.reuters.com/article/us-sime-darby-plant-africa/sime-darby-plantation-considers-exiting-west-africa-palm-oil-operations-sources-idUSKCN1QB0BT

File

Date

2019-02-22

Comment on data source

Sime Darby Plantation considers exiting West Africa palm oil operations: sources

Data source #22

Data source type

Media report

URL

https://www.liberianobserver.com/news/gol-helps-sime-darby-to-raid-plantation-of-illegal-residents/

Publication title

GoL Helps Sime Darby to Raid Plantation of Illegal Residents

Date

2019-03-29

Data source #23

Data source type

Other (Please specify in comment field)

URL

https://chainreactionresearch.com/sime-darbys-potential-liberian-divestment-emphasizes-esg-risks/

Date

2019-02-14

Data source type

Company sources

URL

http://manomanufacturing.com/mpol_index.php

Data source #29

Data source type

Media report

URL

https://www.farmlandgrab.org/post/view/29437-liberia-ngo-to-assist-citizens-to-protect-their-land-from-government-officials-companies-in-bomi

File

Publication title

Liberia: NGO to assist citizens to protect their land from government officials, companies in Bomi

Date

2020-01-29

Data source #30

Data source type

Media report

URL

https://www.farmlandgrab.org/post/view/29430-sime-darby-plantation-completes-sale-of-liberia-operations

File

Publication title

Sime Darby Plantation completes sale of Liberia operations

Date

2020-01-24

Data source #31

Data source type

Research Paper / Policy Report

URL

https://www.forestpeoples.org/sites/default/files/private/publication/2013/12/conflict-or-consent-chapter-12-sime-darby-oil-palm-and-rubber-plantation-grand-cape-mount-county-lib.pdf

File

Publication title

Sime Darby oil palm and rubber plantation 12 in Grand Cape Mount County, Liberia

Data source #32

Data source type

Research Paper / Policy Report

URL

http://www.leiti.org.lr/uploads/2/1/5/6/21569928/contract_matrix_final_version.pdf

File

Publication title

ABRIDGED SIMPLIFIED CONTRACT MATRIX Designed for Multistakeholders Reference LIBERIA EXTRACTIVE INDUSTRIES

Date

2015-12

Local communities / indigenous peoples

Names of communities / indigenous peoples affected

Comment on communities / indigenous peoples affected

The affected area comprises eighteen towns in the Garwula District who are all part of the Vai ‘Manobah’ clan.

Recognitions status of community land tenure

Comment on recognitions status of community land tenure

The affected area is a mix of undeeded customary land, concession areas and deeded land.

Consultation of local community

Community consultation

Limited consultation

Comment on consultation of local community

communities affected by the concession, claimed that their Free, Prior and Informed Consent (FPIC) had not been sought.The company started discussions with the community after the appeal, however these were stopped by the president, stating that the community undermined the government. In 2016 the company has consultation with community with mediator (NGO or govt representative) rather than direct consultation with the aim to reduce conflicts. Before the company can start planting, it needs the approval of the local people.

How did the community react?

Community reaction

Rejection

Presence of land conflicts

Yes

Displacement of people

Comment on displacement of people

No displacement of people is allowed. Instead, the company needs to reach an agreement with the local population before planting on "community-owned" land can commence. However communities claim that people were forcibly displaced.

Negative impacts for local communities

Environmental degradation
Socio-economic
Cultural loss
Displacement

Comment on negative impacts for local communities

Communities claiming that Sime Darby had forcibly displaced people from their land, destroyed sacred sites including graves, damaged their crops and sullied their water sources.

Promised or received compensation

Promised compensation (e.g. for damages or resettlements)

The community and the company agree on compensation proposed by the community such as the building of a school, roads or rice growing for the community.Sime Darby sold the business to Mano Palm Oil Industries in January 2020 and Mano Palm Oil is also expected to continue honouring all contractual obligations with the local communities.

Promised benefits for local communities

Health
Education
Capacity Building

Presence of organizations and actions taken (e.g. farmer organizations, NGOs, etc.)

In 2011, communities submitted a complaint to the industry body, the Roundtable on Sustainable Palm Oil, claiming that Sime Darby had forcibly displaced people from their land, destroyed sacred sites including graves, damaged their crops and sullied their water sources. Following an investigation the company was forced to remedy much of the damage caused. "Sime Darby suspended operations in a contested area and agreed to bilateral negotiations. In 2012, expansion of the plantation over local residents’ property had continued, with compensation remaining either inadequate or absent and consultation non-existent." Nongovernmental organization, Sustainable Development Institute (SDI), has begun working with local people in Bomi to empower them to resist a wave of land grabs in that western county led by elites and concessioners.

Former use

Former land owner (not by constitution)

Former land owner

State

Former land use

Commercial (large-scale) agriculture

Former land cover

Cropland

Produce info

Detailed crop, animal and mineral information

Crops area

Oil Palm (10280 ha)
[current] Rubber tree (121 ha)

Use of produce

Has domestic use

Yes

Has export

Yes

Comment on use of produce

Only 0.1% for domestic use 10,000ha of palm oil is required for the smallest mill that can supply the local market. Only with 50,000ha planted can the company build a refinery that allows for export.

In country processing of produce

Yes

Comment on in country processing of produce

Oil palm production

Overall Comment

Overall comment

An initiative comprised of the private sector, civil society and the Liberian government found Sime Darby culpable of failing to comply with local land laws; and of failing to conduct public consultations or produce due diligence reports as required by Liberian rules – directly contradicting investor policies that require companies to respect national laws and environmental regulation. $200 million investment however the company has not broken even yet and had an impairment of $27 million for 2018 year end. Several illegal palm processors have established themselves within the plantations, the Liberian National Police have raided the plantations in March 2019 to root out the illegal processing. In July 2019, the company confirmed that they are looking to either sell the land to another company (looking at three options- all unnamed at this stage), or give the plantation back to the government. The firm will exit the country at the end of 2019.

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Deal #1388

Location

Location #1

General info

Land area

Intention of investment

Nature of the deal

Negotiation status

Implementation status

Leasing fees

Contract farming

Contracts

Contract #1

Employment

Number of domestic jobs created

Investor info

Operating company

Legend

Data sources

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Local communities / indigenous peoples

Names of communities / indigenous peoples affected

Recognitions status of community land tenure

Consultation of local community

How did the community react?

Presence of land conflicts

Displacement of people

Negative impacts for local communities

Promised or received compensation

Promised benefits for local communities

Presence of organizations and actions taken (e.g. farmer organizations, NGOs, etc.)

Former use

Former land owner (not by constitution)

Former land use

Former land cover

Produce info

Detailed crop, animal and mineral information

Use of produce

In country processing of produce

Gender-related info

Any gender-specific information about the investment and its impacts

Overall Comment

Overall comment

History (34 versions)

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